Table of Contents. Chairman s Foreword 4. Clearswift at a Glance 5. CEO Review 6. From Product to the Clearswift Aneesya Platform 8

Transcription

1 Annual Review 2013 / 2014

2 Table of Contents Chairman s Foreword 4 Clearswift at a Glance 5 CEO Review 6 From Product to the Clearswift Aneesya Platform 8 Exceptional Customer Service 10 CFO Review 12 Financial Performance 14 The Board 15 Contact Us

3 Chairman s Foreword Martin Leuw Clearswift at a Glance We are now in the era of The Internet of Things. Each individual, connected device and enterprise is being affected by this growing phenomenon, where not only people but also things (est. 25 billion by ) are continuously linked to digital networks. The very principle that makes the Internet of Things so powerful - the potential to share information instantly with everyone and everything - creates a huge cyber security threat as well as a data opportunity that organizations of all sizes cannot afford to ignore. 2 The recent high profile breaches at ebay and Target are just the tip of the iceberg. The newly repositioned Clearswift now sits at the heart of this connected world where 100% visibility of critical information is essential. As organizations struggle with widely varying legal, regulatory, cultural and social expectations worldwide, we have the expertise and the automated security tools to protect personal and IP data, whilst simultaneously enabling our customers to take advantage of the potential growth opportunities that this new connected and mobile world can offer. And so, following the successful integration of our first strategic acquisition - to deliver endpoint solutions - we completed the year with growth in bookings, revenue and EBITDA, whilst maintaining recurring revenue at 95%. We continue to invest significantly in the existing product suite as well as in our integrated Information Governance strategy, demonstrated by the Clearswift Aneesya Platform. We enter with an award winning portfolio of products, an exceptionally strong management team with extensive industry experience, a renewed focus on our channel partners and the ambition to grow rapidly as an innovator and leader in our chosen markets. In Lyceum, we have strong financial investors and will continue to seek out further M&A opportunities that provide strategic fit with our product road map. Finally, I d like to take this opportunity to thank in particular, our clients for their continued loyalty and the Clearswift employees who have worked incredibly hard to enable us to achieve this transformation of the business to position us for future growth. 1 Harvard Business Review: Cyber Security in the Internet of Things, Christopher J. Rezendes and W. David Stephenson 2 Verizon Data Breach Investigation Report (VDBIR), May 2014 Over 3,000 clients worldwide >90% Client satisfaction rating 22% of expenditure for R&D Awesome product of the year** Placed in Champion segment*** Gold winner new product development of the year** Over 7,000,000 active Clearswift licenses >90% Client retention rate 95% recurring revenue Trend Setter award* * Info-Tech Research Group, Vendor Landscape Security Gateway 4 ** Info Security Products Guide *** Bloor Research Market Update Document Content Security

4 CEO Review Heath Davies As I reflect upon a transformational year I am constantly reminded of why Clearswift exists and of the value we bring to our clients. The rise of the occurrence of data breaches and cyber security attacks resulting in increased legislation and financial penalties, means that the pressures CIOs and Senior Business leaders face continue to rise. This introduces an acute juxtaposition where the business is demanding continuous collaboration and yet the need to protect critical information has never been more of a priority. Where the information value chain now co-exists with a boundaryless enterprise, critical information protection can no longer be seen as simply an IT issue, more a concern for the whole organization. Our accomplishments during FY14 (Financial Year to 31 March 2014) are significant and create a strong foundation for future business growth. The Executive Leadership team is now complete with the hiring of a new SVP Engineering, Maksym Schipka and a new SVP Sales, Ciaran Rafferty. Both of these leaders bring a further strength of industry knowledge to the Clearswift team. Financially, we have seen the highest level of net new bookings for 4 years. We have also increased revenues and EBITDA, increased our annual recurring revenue and transacted an increased number of deals greater than 100k. Our exceptional service ethos and adherence to service level commitments has helped Clearswift maintain excellent customer satisfaction ratings and continues to be a differentiator for our clients, resulting in a retention rate of over 90% and a positive swing of 8.1 points in the Clearswift NPS score. A 30% increase in the number of professional service bookings has also contributed to higher levels of engagement and satisfaction for our clients. FY14 was a monumental year for product releases. We launched our world-first Adaptive Redaction solution, the Secure Exchange Gateway which enables the use of Content Aware-Data Loss Prevention (CA-DLP) on internal communication and the Secure ICAP Gateway which enables Blue Coat Proxy SG customers to leverage Adaptive Redaction. This has resulted in endorsement from Blue Coat, with Clearswift being the only certified CA-DLP partner in the Blue Coat Business Assurance Technology Partner program. Over the last 12 months we have undertaken a project to re-position Clearswift and the value we offer to our clients. Our vision supports our clients requirements to move from point products to a solution offered via an integrated platform. The introduction of our new technology and new products and the way our clients want them to integrate has given rise to the Clearswift Aneesya Platform. Another key achievement in FY14 is the recognition from the industry of our investment in innovation and new product delivery. The analyst firm Bloor Research recently categorized Clearswift as a champion in their Document Content Security report and Info Tech Research Group rated Clearswift as an innovator presenting us with the highly sought-after Trend Setter award in their Security Gateway vendor landscape. We have also been the recipients of further prestigious awards during the course of the year from SC Magazine in the innovation category for Adaptive Redaction and awarded Awesome Product of the Year at the 10th Annual Info Security Awards 2014 for our Secure Exchange Gateway. During the last 12 months we have started to deliver on our M&A strategy and have successfully closed two deals during FY14 to help drive our vision. The acquisition of Jedda Systems has recently been realized with the completion of the Clearswift Content Aware- DLP suite. With a strong Executive team in place who are focussed on business growth, we have documented and agreed a 3 year plan to: 1. Double the size of our business 2. Deliver 100% of our business through partners 3. Be recognized as an industry leader and innovator in critical information protection As part of this plan we have worked closely with our investor Lyceum Capital, to secure significant additional investment for sales, marketing and research & development which will enable us to retain our competitive edge and drive the planned business growth. Our people continue to be our biggest asset and I am delighted to report that we have made real improvements to our Best Companies score globally, with our employee retention rates being considered to be well above industry average. I would like to thank everyone who continues to support our vision; to enable secure collaboration by delivering 100% visibility of critical information, 100% of the time. Through innovation and investment in our engineering capability we are in a strong position to be recognized as the number one software solution provider in tracking and securing critical information. It is an exciting time to be the leader of Clearswift, a truly awesome company. 6 7

5 From Product... Dr. Guy Bunker...to The Clearswift Aneesya Platform In today s information centric society, it has become extremely important to be able to obtain an overview of how information supply chains provide visibility of communications and subsequent sharing and transfers. The ability to track and trace critical information helps organizations reduce their risk profiles and target their security spend to where the majority of risk exists. A continuous change in business practice is driving our technical strategy, resulting in our developing innovative solutions to solve our clients most intrinsic business challenges. The Clearswift SECURE Gateways remain our flagship products, and during FY14 we introduced Adaptive Redaction functionality as a world first. This enables our clients to deploy an effective Content Aware Data Loss Prevention (CA-DLP) solution that is not encumbered with traditional stop and block behavior. Adaptive Redaction automatically removes only the critical information from the communication or document which breaks policy, while leaving the rest of the information to continue unhindered; continuous collaboration with an assurance that critical information will not be compromised. We also released a version of our SECURE Web Gateway for ICAP and announced a partnership with Blue Coat. The ability for the Blue Coat channel to be able to sell our award winning Deep Content Inspection and Content Aware-DLP technology on top of their award winning gateway is proving to be a win-win on both sides. The introduction of our new award-winning SECURE Exchange Gateway has enabled our clients to apply CA-DLP policies to internal further reducing the risk from the enemy within. The introduction of new technology, new products and the way our clients want them to integrate has facilitated the introduction of the Clearswift Aneesya Platform. Clearswift has traditionally been network focused, however with new working practices the battleground for critical information protection is also on the endpoint; laptops, tablets and smart phones. The Clearswift Critical Information Protection Management Server, created through our Jedda Systems acquisition, was recently released and focuses on the endpoint, enabling both data-in-use as well as data-at-rest DLP; furthermore, when coupled with the Gateways (data-in-motion DLP) offers a comprehensive Clearswift CA- DLP suite. This is also integrated into the Clearswift Aneesya Platform to enable consistent policies across all communication channels. Further integration with the new Clearswift Information Governance Server (available Fall 2014) will enable discovery, tracking and tracing of critical information across endpoints to complement the existing ability within the gateways. Other acquisitions are in the pipeline, and along with our continued investment in research and development, will absolutely ensure that Clearswift continues to deliver the innovations that our clients require. Blue Coat ProxySG Gateway Clearswift Aneesya Platform SECURE Web SECURE ICAP Gateway SECURE Gateway Content-Aware DLP + Adaptive Redaction Windows Server + FCI INFORMATION GOVERNANCE SERVER I G S A G E N T A P Exchange Store Other Stores I n f o r m a t SECURE File Gateway l - i o n R e g i s t ra t i o n - Tra c k & Tra c e - R e p o r t i n g - C l a s s i f i c a t i o n - C o n t r o I & S D K SharePoint Server Other Servers SECURE Exchange Gateway CIP Management Server Organization Boundary 8 9

6 Exceptional Customer Service Dat Thrower Clearswift is passionate in offering best-in-class services to our clients and this drive continued throughout FY14. We further developed our local presence to offer follow the sun 24/7 support as standard, through our regional service desks in the UK, the US and Australia and established a local service hub in Japan. We are pleased that this commitment to delivering the highest levels of service excellence has proven to be recognized by our clients with a significant positive shift of 8.1 points in our Net Promoter Score. Our world-class support team constantly meets or exceeds client expectations; the exceptional quality of our support services is reflected in client satisfaction ratings that consistently top greater than 90%. SERVICES KEY HIGHLIGHTS: Launched Knowledge Centered Support (KCS) with KPI focus on knowledge creation & sharing Continual successful engagement as a trusted partner with our key, strategic clients, through our Premium Service Offering Successfully delivered against 100+ professional services engagements with outstanding results for our clients During FY14, in order to underpin our successful delivery against customer service requests, Clearswift implemented an ITIL Best Practice support methodology with Salesforce.com Service Cloud and launched our Customer Service Portal. Our flexible, tiered service levels are designed to meet a variety of client business needs. Standard support is included in every license, but for clients who require an even higher level of service, our advanced or premium services are available. These provide proactive support capabilities, fast-track escalation and dedicated Support Account Management together with additional services that include regular on-premise service reviews, best practice consultations and on-site support days. The Clearswift team of highly experienced service consultants and in-house support engineers continues to be dedicated to assisting our clients at every stage of implementation, deployment and on-going management of their Clearswift solution.... Excellent work. Another shining example of how support should operate. Knowledgeable and responsive to customer requirements. Great Support. Could not ask for better. Your staff are knowledgeable and very courteous. This is why I continue to do business with Clearswift.... Responses to s and the creation of my own Customer Portal to review my case was exceptional. Well done to the Customer Support Team for this smooth and simple experience. Clearswift Support is the best I get from any vendor!... The Clearswift support crew undoubtedly know their stuff. Their keen technical knowledge coupled with their unerring belief in world class customer service is a joy to behold

7 CFO Review Andy Balchin In last year s Annual Review I forecasted we would continue to be innovative in our products, create further organic growth in our subscription base, continue to improve our client retention rates and start to see a crystallization of our M&A strategy. To be able to report 100% achievement in all of this and more is further evidence that our mission, vision and strategy are the right ones. FY14 saw a continuation of growth in bookings, revenue and EBITDA. This solid financial performance has enabled the completion of two exciting technology acquisitions during the year, plus the release of unique new technologies including Adaptive Redaction and internal critical information protection in the form of our award winning SECURE Exchange Gateway. Clearswift will continue to invest in innovation in order to produce market leading products enabling our clients to securely collaborate through delivering 100% visibility of critical information, 100% of the time. HERE ARE SOME OF OUR FINANCIAL SUCCESSES DURING THE YEAR: 111 new client wins during the year Total new annual subscription bookings for SECURE and SECURE Web Gateway products have increased by >5% 8% increase in bookings from new clients versus prior year 26% increase in new annual subscription bookings for SECURE Gateway from new clients 10% growth in SECURE and SECURE Web Gateway revenue Gross margin improvement to 82% from 80.4% in the prior year EBITDA of 23% 95% recurring revenue through a combination of subscription and maintenance contracts, resulting in highly predictable revenue levels Year on year increase of more than 10% in subscription revenue which now represents 74% of total revenue compared with 67% in the prior year 66% of bookings from outside of the UK, with strong growth in North America, Europe and Asia Pacific Improving subscription and maintenance revenue retention rates of over 90%, up from 88% in the prior year A second consecutive year of double-digit growth in the average size of new annual subscription deals further demonstrating the increasing importance that our clients place on critical information protection A market leading 22% of total expenditure devoted to research and development demonstrating our commitment to innovation in our industry leading products. 60% of new annual subscription bookings from Government, Defense & Financial Service sectors 9 new deals > 100k compared to 3 in FY13 66% of bookings from outside of the UK & Ireland 7% increase in headcount Operating cash conversion continues to be >100% There have been further significant investments in infrastructure providing the Group with market leading systems and processes to support business growth. Organizations are becoming increasingly aware of the need to protect their critical information, not just to satisfy regulatory requirements but also to secure their significant investment made in creating and acquiring intellectual property. The new Clearswift Aneesya Platform has been developed and tailored to enable us to satisfy those requirements. Our investment in innovation, product and people along with a focused M&A program means we are ideally placed to execute on the increase in demand we are seeing; demand demonstrated by a huge increase in our new product opportunity pipeline. We are excited by the position we find ourselves in and are well positioned to again deliver on the targets we have set ourselves; to deliver a 3 year growth rate which will double the size of our new business

8 Financial Performance Total Bookings - UK, North America, Europe and Asia Pacific Gateways Revenue 18,000 34% 66% 16,000 14,000 UK & Ire North America, Continental Europe, Asia Pacific GBPm 12,000 10,000 New Business by Key Vertical 8,000 6,000 FY12 FY13 FY14 24% 22% 14% GBPm FY12 FY13 FY14 Gateway Revenue Financial Services Government Defense Total Revenue EBITDA

9 The Board Contact us & Investors United Kingdom & Europe Tel: +44 (0) Martin Leuw - Chairman Martin is Chairman of the Board. Prior to joining the Clearswift Board, Martin served as Group CEO of IRIS from , leading its growth from revenues of 9m to over 120m per annum. Heath Davies - Chief Executive Officer Heath joined Clearswift in October 2012 and brings with him a wealth of experience in compliance, data and analytics. Heath has worked in the UK, Mainland Europe, North America, Australia, Vietnam, China, India and South Africa. Sales: +44 (0) Tech Support: +44 (0) info@clearswift.com United States Tel: Tel (Toll Free): Tech Support: info@us.clearswift.com Germany Tel: +49 (0) Tech Support: +49 (0) Andy Balchin - Chief Finance Officer Andy Balchin is Clearswift s CFO. He has been in the software business for 28 years, holding CFO and other senior finance positions at SmartStream, SeeBeyond, Documentum, Symantec, Ashton-Tate and Honeywell Control Systems. Jeremy Hand - Non-Executive Director Jeremy co-founded Lyceum. Jeremy works on sourcing and executing investment opportunities and currently sits on the Board of Access, Bellrock and Clearswift. Before Lyceum, Jeremy was a founding shareholder and partner of Duke Street Capital. info@clearswift.de Australia Tel: Tech Support: info@clearswift.com.au Japan Tel: +81 (3) Tech Support: info.jp@clearswift.com David England - Non-Executive Director David has 20 years experience in senior roles at Computer Software Group, Solution 6 Group and Tyco International, with a particular focus on performance improvement, M&A and international growth. He is a non-executive director of four Lyceum-backed businesses: Clearswift, Access Software, Isotrak and Adapt. Lyceum Capital is an independent mid-market private equity investor that specialises in buying and building companies operating in the UK mid-market. In December 2011, Lyceum Capital and management purchased Clearswift. For more information see

10 About Clearswift Clearswift is trusted by organizations globally to protect their critical information, giving them the freedom to securely collaborate and drive business growth. Built on an innovative Deep Content Inspection engine, our unique Adaptive Redaction technology enables deploying a data loss prevention solution simply and easily, forming the foundation of an Information Governance vision, for organizations to have 100% visibility of their critical information 100% of the time. Clearswift operates world-wide, having regional headquarters in Europe, Asia Pacific and the United States. Clearswift has a partner network of more than 900 resellers across the globe. More information is available at Show PASSION in what you do, drive for INNOVATION in everything you do and continuously COLLABORATE to make a difference 18 19

11 United Kingdom Clearswift Ltd 1310 Waterside Arlington Business Park Theale Reading, RG7 4SA UK Germany Clearswift GmbH Landsberger Straße 302 D Munich GERMANY United States Clearswift Corporation 309 Fellowship Road Suite 200 Mount Laurel, NJ UNITED STATES Japan Clearswift K.K Shinjuku Park Tower N30th Floor Nishi-Shinjuku Tokyo JAPAN Australia Clearswift (Asia/Pacific) Pty Ltd 5th Floor 165 Walker Street North Sydney New South Wales, 2060 AUSTRALIA Clearswift Group Ltd, 1310 Waterside, Arlington Business Park Theale, Reading, RG7 4SA, UK 2014 Clearswift Ltd. All rights reserved. The Clearswift logo and Clearswift product names are trademarks of Clearswift Ltd. All other trademarks are the property of their respective owners. Clearswift Group Ltd (registered number ) is registered in Great Britain with registered offices at: 1310 Waterside, Arlington Business Park, Theale, Reading, RG7 4SA, UK.